IEA: Japan Will Need 85 MPG Cars to Survive

Posted by Gail the Actuary on December 3, 2009 - 11:22am

This is a guest post by Morgan Downey, author of Oil 101 and of the Scarce Whales blog.

The OECD International Energy Agency (IEA) is the taxpayer-funded energy advisor to the 28 most developed countries. The agency was created in 1974 by large oil consuming nations in response to an oil supply embargo which began in late 1973.

The IEA publishes an annual World Energy Outlook (WEO) each November. See a video of the 2009 WEO press conference here.

One of the conclusions which can be drawn from deconstructing the 2009 WEO, the IEA's forecast of energy supply and demand out 20 years to 2030, is that the IEA estimates that the average new vehicle sold in Japan in 2030 will have to attain on average 85 miles per gallon. Even small motorcycles cannot get close to that level of efficiency in everyday use today. Those 2030 Japanese vehicles will have to be plug in hybrids and Japan will have to build electrical capacity to handle this demand.

Oil supplied to the global market in 2009 is just over 84 million barrels per day (Mbpd). The big headline grabbing number in the WEO report this year is that the IEA believes global oil supply in 2030 will be around 105 Mbpd. Although the IEA's 105 Mbpd 2030 supply forecast is down significantly from previous WEOs, it will still require the discovery and development of at least four Saudi Arabian sized oil producing areas before 2030. This huge challenge is the IEA's basic "reference scenario".

What most people are interested in from a modeling perspective is the logic and assumptions the IEA uses. In this regard, this years IEA supply side estimate methodology appears to have a certain predictability.

In fact, let me pull up an old chart of mine showing oil supply at 4.6 barrels per year per capita over the past 27 years (see chart below). What does the IEA 2009 WEO forecast for 2030? You will not be surprised that it is almost exactly 4.6. Plug in the current global population and UN population growth estimates between now and 2030 et voila: IEA global oil supply estimates almost to the barrel.

(click chart to enlarge)

There is nothing wrong with using 4.6. Using 4.6 is a reasonable starting point for modeling required oil supply. Remember that the IEA's basic supply side case to get to the 4.6 number assumes at least four Saudi Arabias will be among those discovered and developed over the next 20 years - a whopper of an assumption. Estimating actual oil supply out 20 years is much more challenging given that most of the oil which will be supplied in 2030 has not yet been discovered.

The IEA goes on to estimate how the 4.6 barrels per year per person globally will be broken out by geographic region on the demand side of the oil equation. Their conundrum is that if China, India and other non-OECD countries continue to grow as expected then someone else has to reduce oil consumption through voluntary or forced efficiency. The IEA is forecasting per capita oil consumption efficiency improvements of just over 20% in each of the US and OECD Europe. Amazingly the IEA is forecasting a per capita efficiency improvement of around 40% for Japan. This is after taking into account population changes. These efficiency numbers are the IEA requirements under their basic "reference scenario".

Another interesting point to note is that the IEA WEO forecasts non-OECD (which includes China and India) per capita oil demand to only increase by a total of 14% between now and 2030 despite forecasting compound annual economic growth of around 5% per year for non-OECD countries. This implies extremely large per capita oil demand efficiency, greater than Japan's 40%, in the non-OECD developing world.

What will cause this efficiency: climate change legislation, slower than expected economic and/or population growth, availability of niche alternatives such as CNG and electric vehicles or persistently high oil prices? It will be a combination of all these--but most likely will be as a result of high oil prices. The IEA WEO report forecasts oil prices rising to an average of US$100 by 2020 and US$115 by 2030 (in year-2008 dollars). However, based on an analysis (see pages 15 and 16 of Oil 101) of rare past periods of oil consumption efficiency it is unikely that the IEA's price forecasts are sufficiently high by a long shot to create the required efficiency.

What to do? It cannot be stressed any more how the winners in the IEA reference scenario to 2030, which many outside the IEA see as too optimistic, will be those that get ahead in terms of efficiency. Reacting to oil prices is by definition too late. That is why a Vehicle Efficiency Market is the least painful way for individual countries to gain advantage. We have to create an economic incentive to become more efficient independent and ahead of oil prices.

On the demand side, one of the things that Sam Foucher and I have discussed is whether Jevons' Paradox really only works to a significant degree in developing countries, which the UK was when Jevons observed the phenomenon. It's possible that advances in energy efficiency will actually contribute to increased energy consumption in developing non-OECD countries. In any case, in response to annual oil prices rising at 20%/year from 1998 to 2008, oil consumption in OECD countries has been generally flat to down, relative to 1998, while oil consumption in non-OECD countries has generally been up.

On the supply side, of course I think that the key factor regarding global oil supplies is the supply of net oil exports. IMO, a plausible estimate for the global depletion rate in post-2005 Cumulative Net Oil Exports (CNOE) is in the 5% to 7% per year range, which would suggest that global post-2005 CNOE would be 50% depleted some time between 2015 and 2019. Incidentally, a 7%/year post-2005 CNOE depletion rate suggests that oil importers in the four year 2006-2009 time frame inclusive consumed about one-fourth of all oil that will be (net) exported after 2005.

I expect to see developing non-OECD countries taking a greater share of a declining supply of net oil exports, with developed OECD countries taking a smaller share.

I think that Jevon's paradox is something which only really applies to markets in which higher prices result in supply increases. We appear to be in a period in which higher oil prices are not resulting in increases in total oil supplied.

If oil supply in 2030 is only 105 million barrels per day (mbd) then that implies that everyone (OECD and non-OECD) will be consuming oil much more efficiently on a per capita basis than now or in the past. Hence the 85 MPG cars in Japan.

If oil supply is less than 105 mbd then even more extreme efficiency will have to occur.

Regarding energy consuming devices, I suppose there are two key cost considerations: (1) The cost of acquisition and (2) The cost of energy (with some other minor factors such as maintenance costs, etc.). Let's assume that a vehicle is introduced which costs $5,000, and which will transport four people safely at 100 mpg. And let's assume that both OECD and non-OECD countries buy the vehicles like crazy. I think that the net result would be continued reductions in OECD oil consumption and continued increases (and perhaps accelerating increases) in non-OECD oil consumption, which is what we have seen in recent years.

Since we have not yet seen any case histories of exporters cutting their consumption enough to bring their net export decline rate above their production decline rate, I expect to see the OECD versus non-OECD competition to be played out against an accelerating rate of decline in net oil exports.

Jevons Paradox gets tossed around a bit here on TOD. It seems likely that it only applies in specific conditions:
1. (from Wikipedia article) Also, the Jevons Paradox only applies to technological improvements that increase fuel efficiency; policies that impose efficiency standards by increasing costs do not display the Jevons Paradox.
2. it probably only applies in growth conditions
3. it probably only applies where the real or a substitutable resource is available in abundance
4. it may only apply in conditions of flexible demand

I would argue that none of these conditions hold with regard to oil.

Also, I'd argue that Mr. Downey's "Vehicle Efficiency Market" will be less effective than direct gasoline taxes, as Cap and Trade will be less effective (Hansen) than a direct carbon tax. I don't buy his arguments that the US has fundamentally different conditions than Europe. Something like 90% of our population are in Northeast Corridor, Chicago-land or West Coast. The "poor people are dependent on cars" argument is spurious since we've created that reality through transportation policy. A gas tax would go a long way toward reviving (not inventing) public transportation in the U.S.

The goal of a vehicle efficiency market is to put a value on, and constant incentive toward, efficiency independent of oil prices and government taxation.

Buyers of inefficient 15MPG vehicle would directly subsidize buyers of 50MPG vehicles. The average fleet efficiency balancing point would have constant economic pressure to move higher and this pressure would be controlled directly by the public.

It is a tribute to the effectiveness of the constant drumbeat against any kind of tax that even tiny proposed increases in gas taxes are generally met with explosions of fury, wailing, gnashing of teeth...while price swing of up to 100$ in a few months elicit only grumbles and resignation.

Oil and gas are such precious, powerful and limited commodities, that also can do great ecological harm, that they (and other ff) should be taxed at very high rates. Transitioning away from their use will cost society unfathomable amounts of money and resources, so it only makes sense to start collecting toward those expenses in a way that also puts off the day of reckoning. We have to start internalizing the costs of things that the market views as externalities and which it therefore fails to price accurately.

Tom Friedman in the NY Times does the same thing while wrapping the entire idea in the flag (Gas tax for victory).

We are at war! Who cares that the public will whine! Bring on a gas tax. $3 a gallon is a good place to start.

My mother used to warn, "Stop crying or I will give you something to really cry about!" She was a sadist so it was wise to do as she suggested.

Since high energy prices are a driver of economic hardship, the damage is done, the difficulty is to connect overconsumption with deteriorating economic conditions. The problem is one of leadership. The establishment is completely wrong, looking in all the wrong directions. Any reading of economic or finance papers and articles finds very little notice of energy price issues. Only a handful of finance economists and analysts even mention energy at all: Jeff Rubin, James Hamilton, Andy Xie, Jim Puplava, Daly and Costanza, and a handful of others. The Federal Reserve refers to oil prices only as a component of inflation, ignoring oil availability's deflationary impact on pricing. The large investment banks make energy 'reports' but do not make connections outside of what is required as part of their 'trading book'.

Goldman and other TBTF's are 'house bankers' for the commodities exchanges, so long oil (or gold) positions on the exchanges are likely against Goldman. (Sorry about your long gold trade, partner.)

To my knowledge, the influential mainstream economist Paul Krugman has never used the word 'oil' in a sentence except at gas stations, Robert Reich does not mention oil, Stiglitz does not mention oil, Roubini and Taleb obliquely refer to its importance ... oil is the economically vital substance that dare not speak its name!

This institutional blindness has to change first before anything can be done.

The way things are going only a few will have access to energy and the bulk of the world's billions will have none. Those unfortunates will shuffle along as best they can until environmental degradation does its dirty work. That's how it looks to be playing out here in America. The bulk of the dispossessed and ruined living in darkness and desperation like Okies in shacks in the 1930's, scraping as share croppers or 'porters' while the swells rule the entirety from the 85th floor.

On a bad day (meaning a day when I fail to fool myself into being an optimist.My personal definition of optimist is that nearly all of us here in the states actually continue to live in houses with electricity, running water, some heat, and something edible in the pantry. ) I see your comments a being right on the money.

I do take a certain amount of satisfaction in thinking that if things hit bottom sure enough that the elite in this country will not be able to establish itself on top the same way that the Somozas and the Duvaliers and Hussiens of the world have in thier respective countries.

If the power goes off in the counry and the suburbs the lights will go off in the gated communites too.We are Americans, not peasants in the old world sense.

There are gated communities in my part of the world.I read the culuture of the people and thier attitude as being such that if no gasoline is available in thier nieghborhood, none will be delivered to the rich nieghborhoods either.

"if things hit bottom sure enough that the elite in this country will not be able to establish itself on top the same way that the Somozas and the Duvaliers and Hussiens of the world have in thier respective countries."

Toward the end of their regime, as I recall, the Somozas required peasants and workers to donate their blood so the ruling family could sell it on the international market. Talk about bleeding your people to prop up your power/lifestyle. I think we are already pretty close to this in the US. My neighbor and millions of others are loosing their very houses because of wild ponzi schemes to suck money out of the wallets of the have nots into those of the haves.

Ultimately, yes, we will all go down, but the elites deserve a special ring in Dante's Hell, IMVHO.

The mid-sized cities that have poor if any public transit will suffer the most from a high Gas Tax. I know some people think it would be a good thing to do, but I know to many people that are just barely hanging on, and an increase in taxes won't help them. The one thing I would fear from any new taxing system is the US Government's bad habit of misusing tax monies for something else.

If you could guarantee that the funds collected would get used to increase public transit, that would be one thing, but I don't see that happening with our present system.

If you could guarantee that the funds collected would get used to increase public transit, that would be one thing, but I don't see that happening with our present system.

I fear “public transit” far more than oil, or auto companies, because by definition public transit is a monopoly. Not that it is the only way you are allowed to move around in a city, but in that it can have no other competition. A company trying to compete must do so without the subsidy of tax moneys. In Santa Cruz, California approximately 80% of costs come from the non riding public in the form of taxes. There is no way the public can make the system more economic because it is a closed political system.

I fear “public transit” far more than oil, or auto companies, because by definition public transit is a monopoly.

It's only a monopoly if you let it become a monopoly. American cities once used to have competing, privately owned, bus and streetcar systems. However, they were largely destroyed by publicly funded highway and freeway systems, and the ones which were not destroyed eventually were acquired by the cities and are now run at a loss.

However, the oil and automobile companies were not passive bystanders in this process. For more details, type "General Motors streetcar conspiracy" into Google and see what comes up.

How many privately funded highways and freeways do you see around you? Where do you think a lot of your tax dollars go?

Many people may believe that freeways are actually "freeways" and not "expensiveways", which is what I like to call them to put the costs in perspective.

And how do you propose to keep maintaining these publicly-funded highway and freeway systems if people can't afford to buy gasoline any more?

Don't know that we want to go back to the way it was around 1830 when the omnibus first came to London either. No licensing, route leasing or other regulation. It got right dangerous within a couple years.
By 1833 the govt. licensed the drivers, conductors and buses and what companies survived the lawsuits banded together to form large joint companies which regulated the routes and distributed the profits among themselves. These joint companies where in fact monopolies. If an entrepreneur tried to start up a new omnibus company the joint company would put one of its buses in front and one behind the new buses, thus ruining the new enterprise, while the joint company spread the losses across all its members. It didn't take too long before no one would consider starting up new omnibuses until they had paid a 300-500 pounds to 'buy their times' from the joint company, essentially buying a franchise to operate.

The mid-sized cities that have poor if any public transit will suffer the most from a high Gas Tax.

All the mid-sized cities in Germany, France, Switzerland, etc. have good public transit. It's just a question of priorities.

Mid-sized cities in the US also used to have good public transit, but it has since been shut down and replaced by freeways and private automobiles. You pays your money and you makes your choices. Some choices are better than others. Welcome to the brave new world of declining oil production.

I really liked riding the Swiss trains. They're so smooth and comfortable, and take you everywhere.

I think that Jevons Paradox is probably alive and well in the OECD countries but perhaps obscurred. There is something to be said for the fact that in general OECD countries outsource their most energy intensive and ineffecient processes to non-OECD countries. We may assemble a washing machine in the US but the parts are likely made in China. An airbus jetliner might have its complex parts assembled in france but have the basic components manufactured in Taiwan. Mining and most resource extraction is done in non-OECD countries.

In effect, it would be like the conondrum of trying to reduce Co2 emmisions by switching to compact flourescent lightbulbs. US households would seemily reduce their co2 emmisions by changing to CFL's. However, a new CFL plant constructed in Taiwan or Vietnam, will contribute large amounts of new emmisions to that plant's country. What good are CFL if we reduce 10 million metric ton's in the US and contribute to 11 million more ton's of Co2 in Vietnam? What's the net effect, I guarrantee you noone knows for sure? I dont think you can get a great look at something like Jevon's paradox, a systemic problem, if you narrow yourself to looking a single country whose production processes may be intertwined with many others. Just some thoughts.

Life cycle analysis have been done for CFL and DEL and indeed they are better even taking into account their production chain. The only exception would be in winter if you are using oil to heat your house and if electricty is comming mainly from renewable. Only in that specific case you would doing worst.

Thanks Morgan for a great article. That chart is a real shocker. I had no idea! Growth in oil production has grown by the exact same amount as the world population. And the IEA says that trend will continue until 2030 but with a huge caveat, the growth will be greatly disproportioned between the developed and the developing world.

However by 2030 world oil production will be much closer to 70 million barrels per day than 105 million barrels per day. So how will the shrinkage be proportioned?

I think 70 million barrels (all liquids) per day by 2030 is the best case scenario. No, I believe that many nations, realizing the gravity of the energy crisis, will start to husband their resources, something that M. King Hubbard suggested that the we do about 40 years ago.

Were we a rational society, a virtue of which we have rarely been accused, we would husband our oil and gas resources.
- M. King Hubbert

“Husband”, that is a fancy word for hording. If nations start to hoard their oil, it could get bad, really bad very quick.

And every nation, having learned their lesson from oil, will start to hoard their coal supplies as well. If the world started to switch to coal instead of oil, there would not be enough coal today. And the world’s supply is very disproportioned with 76 percent of the world’s coal supply concentrated in just five countries, the US, Russia, India, China and Australia.

There are several other nations with a heavy population density that have virtually no fossil fuels at all, to name just a few, Japan, South Korea, Taiwan, Bangladesh and all those “oil less” Middle Eastern nations.

It is my sincere belief that there is no way we can possibly have a soft landing with this mess. And by soft landing I mean a slow dieoff instead of a catastrophic collapse.

To husband something means to manage it well and frugally to make it last.This is not exactly the same thing as hoarding,but the net effect after a period of time will be the same insofar as the have not countries are concerned-a prudent manager or country will not sell anything which is not easily replaceable if it is possible to avoid doing so.

I expect countries such as the US ( and Australia ) will sell or continue to sell thier coal because of our shortsighted way of looking at things right up to the point that we faced with shutting down some of our own coal powered industry.We probably aren't even smart enough to hold back to raise prices ala OPEC.

The giant corporations that own the coal probably will not have much incentive to look after the US first-unless some politicians come to power capable of nationalizing the industry.

This assumes of course that at that time we are still functioning as an industrial economy and that the customer has something we really need-maybe rare earth metals useful in building high efficiency electrical equipment.Or some dregs of oil.

It is interesting to speculate corcerning what the other coal "haves" might do which probably depends as much as anything on the type of govt in power at the time.A relatively secure authoritarian govt capable of understanding it's own self interest would very likely indulge in some hoarding behavoir both to conserve for thier own use and to force up the price of such amounts as they decide to sell.

Back when I lived in the city I had a little Honda motorcycle that got incredible mileage driving it at twenty five mph or so on city streets in residential areas.I never kept any records but I 'm sure it got over a hundred mpg driven at those speeds.There are lots of people getting mileage results that are as much as fifty percent above normal by using hypermiling driving techniques.Some of them have posted here.

When tshtf in places like Japan they can slow down a lot easier than they can walk.We will be doing the same here.

It will be politically possible at some point to pass laws that impose near draconian penalties for speeding just as we have passed such laws about driving under the influence.

If potential purchasers of fast powerful cars and trucks once realize that they will never be able to exceed say fifty mph on the freeway without losing thier liscense that might just put the brakes on the sale of oversized and over powered vehicles a lot faster than a cafe standard.

Back in the early 70's my father and I would cruse around town on a Honda 65 street bike. It weighed about 180 pounds and a 65cc engine. He weighed about 160 pound and I weighed about 100. Top speed with the wind to our backs was about 55mph. We would get 100 to 110 mpg all the time.

I love your idea about draconian penalties. But, better yet. Govern all new vehicles at about 55 mph and 500cc or less. This would allow electic cars to compete with gas.

Today, my father's new Buick LaCross has 280 hp and the speedo that goes to 140 mph. It's fuel economy isn't any better then his Buick he bought 20 years ago. Just twice the power.

One thing about us Americans, we like to go nowhere fast. We are our own worse enemy. It would be nice to be able to drive the speed limit on the highway and not get run over by someone going 85 to 90 mph.

Something that makes my eyes look like this: (@)(@) is that I STILL see people driving for fun! It's still cheaper than many other forms of entertainment.

My Honda 250 twin gets 75MPG and it's considered almost a toy these days, new bikes are 750cc and up, almost all are 1000cc and up. But back in the day, a 250 was a respectable size, with lots of 125's, 175's, 70's, and so on. Everyone passes me on the freeway.

Jevon's Paradox is alive and well, since the bike enables me to travel to Santa Cruz to hustle crafts for a living, where without it I'd have to stay within bicycle range of where I live, and likely be making the same 1/2 or 1/3 of minimum wage washing dishes, cleaning stables, maybe washing cars, waving a sign, or holding one at a freeway on ramp.

Luckily as my income falls, the motorcycle is beginning to look unreasonable even at 75MPG and less than $100 a year to insure, and once I'm done with EMT school I may sell it and invest the money in preps, a decent bicycle, and a bunch of bicycle tools and spares.

You can drive too slow to get the best fuel economy but this is due to the fact that cars and trucks are equippid with engines and drive trains that are designed to obtain the best fuel economy at typical driving speeds, which are a lot higher than 25 mph.The amount of power a car engine produces in relation to the amount of fuel it burns is highest at the speeds the engine runs most of the time- this is from roughly forty to seventy mph or so.

A heavy duty engine such as the ones used in big trucks and tractors is designed to produce the most power per the amount of fuel burned, the greatest fuel efficiency, at full speed fully loaded-this is to say running flat out.If the engine is well matched to the job -meaning not oversized but just big enough -it will deliver considerably better fuel economy than a larger engine under the same conditions.

If you slow down too much even though the amount of energy needed to move your car falls off fast, the efficiency of the engine falls off even faster.This is especially true if you go so slow that the transmission must be downshifted from the top gear or if it fails to shift into the top gear if it is an automatic.

Just one more reason to use electric engines. Fossil fuel engines just have an awful efficiency/power/torque/rpm curve compared to electric. The first busses and innercity delivery trucks are already being electrified, I wonder how long it will take for the first long distance hybrid or even EV trucks will appear.

This should be a well-known fact, but apparently it is not known to a lot of people: Cars are designed to run at an optimum cruise speed. If you travel at a higher or lower speed, the fuel economy gets worse.

The car is less efficient at lower speeds because it is designed that way. It drops into a lower gear and the reduction in aerodynamic drag is more than offset by suboptimal engine performance and greater mechanical friction.

This is why the 55-mph limit of the 1980s was pretty useless. If people wanted better fuel-efficiency, they needed to buy smaller cars designed to deliver better fuel economy, not drive their existing oversized, overcarbureted, gas-guzzling road hogs slower.

Tests at the time showed that economy of 70's cars peaked around 45 MPH if I'm not mistaken. 3-speed automatics didn't have particularly tall top gears. My car appears to get upwards of 50 MPG at 45 MPH (I've never been able to take a long run at that speed to test it).

Everyone who had physics at school should know that this is nonsense: Air friction increases exponentially with speed, and so does energy consumption. The only exception is when the car is close to being drawn to a halt.
In Germany, there were discussions about the urban speed limit from about 30 mph to about 20 mph. Experiments showed that the speed reduction DID reduce gas consumption (although not much).

I bet that websites with statements like this are sponsored by the oil industry or the like.

Just to pick a technical nit, but the increase is polynomial, not exponential. That is, if v is velocity, drag increases in proportion to v^2, and the power to overcome drag increases in proportion to v^3. Exponential would be a^v, for some value of a>1. As v gets sufficiently large, the exponential grows faster than a polynomial of fixed degree.

Given a small number of fixed gearings, engine efficiency at different RPMs can have noticeable effects at low velocities.

I've already done First Responder, next is EMT-B, if I can, I'd like to get Medic also.

As I've outlined, I'm basically not allowed to work in any job that's documented right now. It's going to take about another year of hard work to change that, getting my EMT-B and getting the bankruptcy done.

By that time there may not be any economy to speak of. I honestly think there's only a 50/50 chance of my actually earning money as an EMT. Becoming a full medic is a long shot. I have a good chance of funding but I have to pay it back - I don't want to borrow what I can't pay back. Yes the source of funding is secret and not documented anywhere.

At least I will know I have done the right thing, you're outta work you're supposed to retrain yourself. At least I'll know I tried.

Chances are good though that my EMT and possible medic skills will be using in the coming battles, and will be paid for through some underground enterprise, hopefully more lucrative than the ones I've been doing so far.

EVERYONE is out of work now. Nurses, dentists, etc. There are no safe jobs.

The first thought after reading your prediction about 70mbd (all liquids) was you either don't have a clue what you're talking about or you need a check-up from the neck up...Iraq’s 8mbd potential came to mind,... Iran's... Brazil’s sub-salt fields,... Venezuela almost untouched heavy oil,... Canada's oil sands,... Azerbaijan's and Kazakhstan’s new fields,... the huge increase in global production of NGL's and condensates...the new game-changer technologies making possible the Bakken play and the 10% recent increase in US oil production...Africa's new discoveries: Uganda, Ghana....

But that was a superficial thought. I've suddenly realized YOU ARE RIGHT!...In 2030 the world is only going to produce 70mbd or less!
And that's because the world is not going to need more than 70mbd of oil!

The ongoing transition to CNG, Electric and Hybrid vehicles made possible by the humongous reserves of shale gas, will make the oil redundant. Since the price point where the shale gas is profitable is less than $5/Mmbtu, there will be no point and no need in extracting oil where the costs would be higher than $30/Bbl.

luscar99 I am not predicting 70 mbd supply for 2030 in my comment above. I was replying to a prior comment as to what the efficiency and economic implications would be if 70 mbd in 2030 were to occur.

Also, the main point of the post was to specifically show that electrics, hybrids and CNG will all be required by 2030 to make our oil use vastly more efficient on a per capita basis even if oil supplied is as high as 105 mbd. Natural gas supply had better be humongous. It's all going to be needed.

For the experts: Diesel cars (generally) gets more MPG than gasoline cars, but diesel fuel also has more BTU per gallon, so I'm guessing less diesel can be created from each barrel of input at the refinery. (You can stop me there if I'm wrong...)

My question is, amusing the same car, how much better would the mileage be
for diesel when measured in barrels of oil at the input of the refinery?

Not exactly sure George. Diesel yields vary from one oil to another but something on the order of 25% if I recall correclty. I just find oil/NG. When it come to gasoline/diesel I just burn it like everyonr else.

My question is, assuming the same car, how much better would the mileage be for diesel when measured in barrels of oil input to a refinery?

A barrel of crude oil contains a certain number of hydrocarbon molecules. These hydrocarbon molecules have the potential to release X BTUs of heat when they react with oxygen (when the oil is burned in an engine).

One can theoretically make just diesel OR just gasoline from these crude oil hydrocarbon molecules by distilling, cracking and/or combining the molecules and adding hydrogen.

Depending on the type (how heavy or light) of crude oil input to the refinery it may take more or less energy to produce just diesel or just gasoline.

The end result (diesel or gasoline) cannot contain any more than the original X BTUs the original barrel of crude oil contained.

Because of they way they operate, diesel engines are often more efficient than gasoline engines at getting more of the hydrocarbon molecules to react with oxygen and preventing unburned molecules from being vented in exhaust.

Because of they way they operate, diesel engines are often more efficient than gasoline engines at getting more of the hydrocarbon molecules to react with oxygen and preventing unburned molecules from being vented in exhaust.

To have anything even remotely acceptable emissions wise combustion has to be nearly 100% complete. So I don't think that can be more than a tiny factor. The biggest difference is the diesel is higher compression than gasoline (gasoline would spontaneously precombust before it hit maximum compression if you tried), and so the conversion of thermal energy to mechanical energy is better.

Relative BTUs are fun to experiment with. In my alcohol stove experiments, I've been using 91% isopropyl alcohol, which has the most BTUs among the ethanol-methanol-isopropyl family. My stoves burn hot, but as I discovered the other day, my nice spinning-flame stove was filling the room with soot! I could see my flashlight beam. I realize this was a mixture problem, so I made a new stove, since I can't afford to go out and buy stuff in cans, finding a large only a bit rusty can in a pile of junk inspired me. I made slanted H-slots low around the sides, bending the upper tab out and the inner tab in, and when that was done, put a Vienna sausage can inside in the middle, filling that with isopropyl and lighting it. Now I have a spinning flame that's smaller than the previous one, with a lot of air coming in to the amount of alcohol vaporising off of the smaller surface of the Vienna sausage can. Soot is almost undetectable (if I shine a flashlight right over the top very occasionally I can see what looks like a tiny bit of soot coming off. More tellingly, after hours of use it passes both the visible-flashlight-beam test and the next-morning-black-booger tests).

The thing is, these higher-BTU fuels need more air, isopropyl's 3 carbons to ethanol-methanol's 2 and 1, take more oxygen to produce H2O and CO2 without extra C.

So, since I want to try building some soda-can blue-jet stoves for fun, I got some "Yellow HEET" which is ethanol, and tried some in my new flame-spinner. I got an almost completely blue flame with bits of pink(!) but interestingly, the exhaust felt almost cool. A foot over the stove it did feel cool!

Conclusions:

(1) Different BTU's detectable by "feel"
(2) Isopropyl is the manly fuel, eth and meth are for weenies.
(3) Iso needs a stove design that takes in a lot more oxygen, a good iso camping stove hasn't been done yet.

"Because of they way they operate, diesel engines are often more efficient than gasoline engines at getting more of the hydrocarbon molecules to react with oxygen and preventing unburned molecules from being vented in exhaust."

This is not the case. The reason for the greater efficiency of diesel engines is the higher compression ratio of the engines, and because many over-the-road diesel engines employ turbochargers which can utilize some of the waste heat in the exhaust to boost the intake pressure of the incoming air. Diesel engines are on the order of 40 percent efficient versus about 28 percent efficiency for gasoline engines.

"One can theoretically make just diesel OR just gasoline from these crude oil hydrocarbon molecules by distilling, cracking and/or combining the molecules and adding hydrogen."

Theoretically true, but practically not true because no refinery can convert all of the heavy part of the crude oil barrel to either diesel fuel or gasoline. Furthermore, the cracking and conversion that occurs in refineries ends up making some gas which cannot be used in the liquid fuel supply. However, the energy used to run these conversion processes can largely come from natural gas and electricity so as to avoid using up liquid feedstocks for that purpose (helping to protect liquid fuel production volume (as much as possible to delay peak oil) by sacrificing other energy sources which we have more of.

EOS: I was trying not to be too technical. When I said "because of the way they operate" I meant higher pressures, turbocharging, intercooling etc. and that these all together result in an increased probability of any hydrocarbons in the cylinder being burned on each engine stroke.

I realize that no refinery produces just diesel or gasoline. I was trying to explain in a simple way that there is a limited amount of energy potential in a barrel of crude oil and that if one theoretically refined an entire barrel of crude into just diesel or just gasoline that both would contain similar amounts of energy potential as the original crude oil.

A barrel of crude oil contains a certain number of hydrocarbon molecules.

But that's not really a constraint. In a sophisticated refinery, the refined products contain more molecules than the input crude oil - but the molecules are smaller. Refineries typically output more volume as products than they input as crude oil (a factor which goes on the books as "refinery gain").

The end result (diesel or gasoline) cannot contain any more than the original X BTUs the original barrel of crude oil contained.

Not really. You have other energy inputs going into the refinery as well. Once of them is electricity, so the refinery might in concept be turning electricity into diesel fuel.

Another input is often hydrogen from some source - a favorite one being natural gas, which is available in large amounts at low cost at this particular point in time. The refinery may effectively be converting natural gas into diesel fuel.

I think Gail had a breakdown in one of her background articles from EIA data, and diesel accounts for around 20% of petrol product, gasoline around 46%. Now, the distillate fraction also contains heating oil, so you would need to break that out. But, for purposes of discussion, a 42 gal bbl of oil should have around 8-9 gal of distillate and 19-20 gal of gasoline.

If all the current gasoline burning was shifted to diesel hybrids, even with the higher mpg, would we have to be refining around 2X - 4X more oil to meet current demand?

I tend to concur with the position that we are going to have to give up the personal car sooner or later. Poor folks walk or take the bus!

Is there much wiggle room with the 20% for diesel figure? Can different processes increase the fraction that becomes diesel, or is it really only about one fifth of the oil that can turn into diesel?

[Edit--I see RMG answers this below.]

My sense is that the original value of oil was that it could be turned into diesel that was most useful for industrial and agricultural purposes. But there was all this other gasoline left over. The solution--invent the modern car culture to soak up (and make a profit from) what otherwise would be a waste product.

This is mostly based on speculation rather than in depth historical sleuthing. I would be interested if anyone else has come to similar conclusions.

quite a bit of wiggle room indeed, in Alaska (2008) diesel and jet fuel (jet fuel, #1 diesel, kerosene, all close enough to each other for horshoes and hand grenades) accounted for 70% of refinery production while gasoline and naptha accounted for 15% and other products made up 15%. Small population and jet fuel export capabilities determined the mix. This came from the graphic at the bottom of the second page.

Flint Hills might be a bit of a special case because they can put product they don't want to mess with right back into the TAPS crude flow, but electric rates are high in Alaska, so that must not be a very important limiting factor in the process. Can't say how much n/g they use. It would have to be extracted from the crude flow it gets mixed in with on the north slope. Unfortunately Flint Hills Refinery's own site has become somewhat opaque, and the old source links in the above link no longer get you anywhere. 2006 was a boom year for jet fuel sales.

Look also at the fraction breakdowns for refineries in Europe as opposed to those in the lower 48. Europe has a much higher percentage of diesel cars than the US, so cracks to get more diesel and less gasoline. Even so, I seem to recall that there is some gasoline/diesel trade between European and East Coast refineries because it's cheaper to ship product than to use really exotic techniques to get the gasoline vs diesel yield to match the market demands.

There is lots of wiggle room for the percentage of diesel. Check out Western Refinery quarterly statement a year or so ago when there was a shortage of diesel on the market. There Yorktown refinery was putting out almost a 50-50 ratio of diesel and gasoline from heavy crude. It has a lot to do with how complex the refinery is.

Electricity in a refinery is mostly used to pump the oil though the refinery. Natural gas is mostly used to heat the oil to seperate it. To get those ratios, additional refining is required. So much that the industry at the time was thinking that there was going to be an asphalt shortage in the future because of the demamd for gas and diesel. Asphalt is kind of the remains of the refining process. Some of the complex refiners where ending up with very little in asphalt.

I don't know how much diesel can be obtained from a 42-gallon barrel of oil.

How much are you willing to pay? If you're willing to pay enough, the refineries could probably get 42 gallons of diesel fuel from a 42-gallon barrel of oil.

However, you are probably not willing to pay $20/gallon, so this is all wishful thinking.

For the skeptics who don't think it can be done, let me mention a few words: "cracking", "reforming", and "refinery gain". Feel free to research it at your leisure. Don't bother me, I'm retired from the business.

I don't doubt it's possible to refine crude 100% to diesel, but the high cost you point out makes it uneconomical just to get the ~30% efficiency gain over gasoline. We'll need a mix of vehicles that can efficiently burn both gasoline and diesel, maybe gasoline for scooters and minicars and diesel for trucks, buses and heavy equipment. Cars the size of our compact and up will become niche market luxuries.

The thing with non-enclosed vehicles is, the aerodynamics SUCK. This goes for bicycles, scooters, motorcycles. Anything small and light and not FULLY faired (enclosed by a smooth aerodynamic shell).

When I had a Prius, I noticed that just cruising around city streets at 25-35MPH, with the windows down, just killed the mileage. It's much more efficient even at those speeds to keep the windows up and run the fan or AC.

As speeds go up this gets much worse!

Get the speeds down, get it like Asia where on your moped, 25MPH is really cookin, and you get decent efficiency and really good MPG's. A bicycle at speeds under 15MPH is so efficient, that a 200-watt motor like a human can go for hours and not really feel it - the main training is in hardening up your butt. Yep, an average person can do a "century" ride, all they have to do is average 10MPH for 10 hours and they're there - the limiting factor is their butt!

This is because at these low speeds, "aero" makes relatively little difference. An added bonus is that the region at or under 15MPH humans are relatively durable, and injuries are just not a big part of the picture. We appear to be built to take "crashes" at speeds we can generate on our own two feet.

However, our culture in the US is dedicated to more power and more speed and damn the consequences. A guy with a big powerful car/bike gets laid. A father with a big powerful SUV, a grill, and a super package of hotdogs is the hero of the soccer team, their moms, etc. Like any other animal we're doomed to seek out what gives us breeding fitness and even among the bamboos of Vietnam, the guy with a Honda 80cc scooter has the edge over the guys with 50's. Having ridden both, even that small difference is big.

People in the US are not getting onto bicycles because it's dangerous out there! Our culture is one big standoff: I'll ride a bike when YOU get out of your SUV so you won't run me over, and meanwhile YOU are waiting for ME to do this. So far, only the very poor and outliers are riding bicycles.

Seriously, recumbents have an distinct advantage in a) the butt factor b) aerodynamically. Some of the enclosed three-wheeled variants act like a sail as long as the wind isn't coming from straight ahead. Sustaining 40km/h in an enclosed recumbent is like doing 25 on an ordinary bike.

Having grown heavily steeped in the car and motorsports culture, I think you nailed it about the psychology part. I'm still figuring out a way to take my knowledge of the culture and use it to turn the thinking around.

About the aerodynamics, motorcycles still have less total drag than cars because of the low frontal area. An unfaired full-size motorcycle with no special tweaks can easily get 50mpg at freeways speeds. That's great for a cheap, single passenger vehicle, but not so great compared to four people in a sedan.

Thanks, folks! I've wondered about this for some time, but I don't recall this discussion at TOD.

Here's what I'm taking away:

1) Diesel engines have a significant efficiency advantage over gasoline engines, even when the higher BTUs of diesel are taken into account.

2) What you decide to make with a barrel of oil at a refinery is not a simple issue. There is some flexibility in the gasoline / diesel ratio, but assuming the dollar costs mentioned of pushing the ratio too far are mostly energy costs, the most efficient use of the fraction of oil can be readily turned to motor fuels is still a mix of diesel and gasoline.

"the average new vehicle sold in Japan in 2030 will have to attain on average 85 miles per gallon. Even small motorcycles cannot get close to that level of efficiency in everyday use today."

In India, the manufacturer BAJAJ already makes a 125cc motorcycle that can attain up to 202 mpg US in very favourable driving conditions.
The engine of this motorcycle is a 4-stroke, 1-cylinder, with 2 spark plugs.

"Even small motorcycles cannot get close to that level of efficiency in everyday use today."

That's not true. Here in Canada, Honda sells a CBR 125r that gets over 90mpg (I have one, the fuel economy is really that good, and it's no slouch on the highway either). This motorcycle is available in EU, Australia, & Japan, but not the U.S..

The only problem with "small" motorbikes is the wind and I regularly fight with my 150cc (maybe it's me!) in unfavorable conditions. Further, not sure I'd want my wife or kids riding to work on a 125 with squalls/passing trucks/whatever abounding.

Remember that the IEA's basic supply side case to get to the 4.6 number assumes at least four Saudi Arabias will be among those discovered and developed over the next 20 years - a whopper of an assumption.

Yeah, and we'll have that whole potato shortage solved just as soon we find four more Idahos.

I'm not some Worth1000 vet whose day is one big Photoshop, so this is the best I can muster - but I think it conveys the enormity of what they're proposing - Kashagans showing up on a yearly basis, almost. 105 mb/d equates to 38.4 bbo per year, which still looks steeper than the past 20 year trend too, if you're keen on extrapolation; might futz around with those numbers later.

The efficiency in transportation IS the big problem with decresing oil and now the Copenhagen summmit adds up to this, but do not miss the point: electric cars, (battery and plug-in) are for limited use (urban only or Golf). W-T-W Efficiency is then given by electricity generation and (expensive) battery lifecycle.

Even on TOD lots of posters are still preoccupied with keeping the cars running. Taking that squint-eyed look at just +all+ the factors involved, I can't help feeling that Jim Kunstler has it right: forget happy motoring for the common man on any engine, any machine, any fuel. It's departing, and that's that.

'Course it's easy for me to talk, having given up personal car ownership for ever several years ago, and having become physically and psychologically hardened to cycling right through the year. Yet even I have a shameful confession to make, right now, this evening:

As I write this, recovering from flu, feeling fragile, having had to go out in the bleeding razor-sharp wind to do just the minimum livestock care and fire-wood getting, I'm now faced with a seven-mile bike ride, in the dark, over the watershed ridge, to my partner's house, for dinner with friends -- and for the first time I've cracked. One of my buddies is driving over, in his lovely warm, enclosed car, to get me because this time I can't face that ride. Wimp! I blame this soft life for melting the steel out of my spine.....

Living in Japan, I`d like to say that this country still has a significant number of people, now old, who remember what it was like growing up without many cars around at all. Many people in their 70s and 80s never learned to drive because when they were young there was not the need for that, with trains, a simpler lfestyle and the walkable village infrastructure still virtually intact.

This country still has that walkable village infrastructure all over the place (of course not everywhere!). Tiny lanes and narrow streets lined with old wooden houses where it is now not safe to walk because of the cars that race past....but if you watch carefully you`ll notice that the number of cars (all over the place) is now going down. And those old narrow streets are becoming a lot more peaceful than they were even 5 years ago. Can a culture have a memory? I think the answer is yes and this country remembers what it was like before oil....

Near where I live there are some used cars dealers and another one has recently bitten the dust, another space that was overrun with automobiles is empty now, shaking off its time spent as a used car lot like a bad trip coming to an end, emerging from being a hostage unjustly held for too long, venturing out into the light with relief and surprise. And this experience will be repeated all over this country and all over the world actually, square meter by square meter taken back from the cars that seized them like an evil villain all those years ago. Poverty? No one will call it so since it will be a standard international phenomenon by then.

By all means rent the Japanese anime movie "Spirited Away" (a Studio Ghibli effort from 10 years ago). Chihiro`s parents (who are on a car journey) stop for a walk, eagerly consume a forbidden feast and turn into fat pigs. To save them, Chihiro ventures into an enchanted town with a lot of traditional old features (no cars, narrow streets). There is a character dressed all in black, a black hood, a black robe, who is quite troubled, almost venturing on evil. But Chihiro helps this character to find peace. He disgorges an enormous river of garbage on his way to purification. It is a startling sight and also brings clarity to this country`s collective way of perceiving the end of the oil age. It will bring the end of wasteful and unnecessary consumption of material which ends in so much garbage and pollution. This movie was an incredible hit here, millions went to see it and everyone knows the plot.

Japanese may therefore subconsciously be waiting eagerly for the end of the oil age! But Japanese are not different from anyone else fundamentally....I`d like to suggest that maybe all of us, whether we know it or not, are eagerly anticipating a return to a world where cars, so dirty, so noisy, so wasteful, so compelling in one context and so crazy in another......... are no longer to be seen or endured.

I worked on bicycles as a kid, keeping various Schwinns operational, but I would like to express my thanks to Japan for making a certain light-blue Fuji I rode for a few years when I was first out on my own.

I was in Honolulu, a very bike-unfriendly place, but I didn't care, I made up my own rules and self-learned a lot of tricks messengers know, and the only accident I had was hitting a rut between the road and gutter along the Ala Wai and flipping head over heels spectacularly, but turning out to be unhurt, surprising the Mainlanders who stopped to see if I was OK.

I'd replace a tire when it was down to almost no tread, patch tubes 3X before replacing, etc. I put on a new seat, learned to tape handlebars, etc. Keeping the shifters working right was beyond me, I kept it on one speed all the time and just mashed it going up hills.

I rode it to work, to places like the main library, places I needed to go, and places for fun. I surprised my sister by going out to Hawaii Kai to see her on it, saving bus fare and getting to see the aftermath of the hurricane that had gone through the day before.

I got busted once returning from a Reserve meeting at Ft DeRussy for not having a light, I had to walk it out of sight of the cop, so I got one of those generator-lights. This thing also had "dork levers" on the bars, which I loved - they comprimise braking, but in an emergency situation I'd have been able to slow down enough to fairly harmlessly crash into something, I knew this from riding brakeless bikes as a kid.

It was so "eh" looking that I got out of the habit of locking it, someone (we called him the "panty bandit") stole underwear off the line, but no one stole my good old Fuji.

That bike and I went through no end of adventures together, ultimately I gave it to my sister who told me someone stole it, but I bet she sold it.

I was living the "bicycle lifestyle" for real, no tooty-frooty jerseys, no fancy panniers, just a young adult on a bicycle, able to go all kinds of places and never needing fuel, a mechanic, or any sort of paperwork.

The above link is about an independent movie being made in Nova Scotia, Canada about a couple who, in 2011, decides to attempt to live sustainably off-grid in a rural area to escape the apocalypse. It is more implicitly about Peak Oil than Spirited Away. I will be watching it.

Maybe there should be a thread about fictional movies (not documentaries, those get plenty of coverage on here) related to Oil-Drum relevant issues.

Roger works a squalid job and lives in a squalid apartment in Sweden in 2024, when oil has run out and an elaborate subway system links the European continent. Then one day, he hears a voice in his head…

Could not agree more.
The problem is the vehicles. They need to be limited immediately.

So if we are intent on exploring a world of fantasy.................
Personal transport should be taxed and double taxed and probably triple taxed and then tax tires. Get them off the road and a whole world of possibilities will ensue.
World wide cooperation on this matter is essential. While we are at it, ban mobile phones except for essential services. Turn off the GPS system. Remove 95% of TV channels. Limit the internet. Tax the theme parks to hell, turn the cruise ships into housing and think of a use for the giant sports arenas which will immediately go out of business when television is limited.

Consumerism mostly benefits the large corporations. Lets find a way to limit it.
Why don't we have a think tank on what the world can do without and the benefits of such an exercise.
.......and just another rant, ignore and move on.

In fact look at the typing itself - not this site but most sites now limit you to manual-typewriter speed.

Sure you can download movies OK still, but all forms of comment discussion, feedback, seem to be being choked down. I've never seen so few comments on the sites that still allow them, you're put through a registration process that keep people out, half the time a really stimulating article will have NO comments.

You can't cut and paste URLs any more, there's no link to share an article through email etc.

It's all being squeezed down.

I'm trying to be AHEAD of the curve, live like it's the 1930s, no cell phone, no means of communication other than written letter. I have a blog finally after 10 years of trying, but I am sure that will be gone, along with the Internet as we know it, in 10 years.

Remember in the 1930s typing WAS done on a manual typewriter (in that sense the Internet is "with it") the average person didn't have a phone, they had an AM radio run on batteries because they didn't have "the electric" half the time.

This really makes me want to ELP even more than I've already been, at what point does it become cause for a huge sigh of relief to have a bicycle, tools, spares, and be limited to a 10-mile radius from one's home except for special occasions, when you take the train to see the big city?

Lithium Batteries: Nothing But Illusion
by: Jack Lifton April 19, 2009
EXCERPTS:
Lithium production numbers are typically reported not as metallic lithium (needed for batteries) but as lithium carbonate, Li 2CO 3, which is only 1/6 lithium. The battery pack for the Chevrolet Volt using a 16kWh lithium-ion technology RSB will require 16kg of lithium.

Lithium production for 2008 was 27,000 metric tons, and that, as the USGS says, 25% of that went to battery production for personal electronics, laptop computers, and power tools, etc. The the other 75% of the lithium produced went to existing uses such as the production of glass, ceramics, plastics and pharmaceuticals Thus, batteries for cars will require new production of lithium.

Let’s assume that the global production of lithium can be quadrupled in the next 10 years (which is not assured). Let’s assume further that every bit of the increase will go to produce lithium-ion batteries for cars. This will give us 75,000 metric tons of lithium, calculated as lithium metal, to be used annually to make car batteries by 2020. This means that in 2020 the global car industry will have the resources of lithium to build 75,000,000/15 = 5,000,000 extended range plug-in hybrids of the Chevrolet Volt.

By the time those batteries are recycled, in 10 years, the recycled lithium will be able to add only another 5,000,000 vehicles a year to the global build. This is a very small number compared to today’s fleet of cars of globally 750,000,000. Thus, for the next generation,the total annual possible production of electrified vehicles will be limited by the rate of natural resource production, particularly of the rare earths (yttrium) and lithium used in LiFeYP04 batteries.

So, when Warren Buffet says that in 20 years all new cars will run on electricity, not oil, he should tell us where the necessary lithium is coming from.

It is, of course, possible to run electric vehicles on conventional lead acid batteries, they just don't charge as fast or go as far or as fast. Mostly, we will be (re-)learning to live withing these kinds of limits more and more as things go on anyway. And mostly we have to move past the insanity of the car culture. But for many purposes, EVs could play a roll.

Nah who worries about lithium these days? C'mon, it just takes a few 100 billion/year years and everyone has a molten salt thorium reactor in the rear of their car. And if you don't like the idea of thorium salts keeping our roads free of snow and ice, then you can always go for the Polywell 2000 powerplant: 0 to lightspeed in 10 seconds!

As units of measure are entirely arbitrary, I hereby exercise my right as an American to express my own gas mileage in terms of kilo-cubits per firkin.

(For those of you who might be interested, one kilo-cubit per firkin is equivalent to 31.6 miles per gallon.)

I also beg to differ. The American economy does not so much resemble a 'really bad skiing crash', as it does the result of a collision between a meth amphetamine-addled driver of a seriously modified Kawasaki Ninja going 160 mph (42.6 kilo-cubits per hour) and a large dump truck filled with rocks slowly lumbering across its path at the wrong place and the wrong time. Bug splat!

Why do Europeans call diesel fuel "gasoil"? And those crazy English, calling their fanny packs "bum bags". I've seen a few bums and they don't use fanny packs, they carry their stuff in shopping carts.

Engineer, the substitution of "bum bag" for "fanny pack" by the British is totally understandable. "Bum", in this sense, is the same as "butt". So bum bag means butt pack, same as fanny pack means in America. Fanny, on the other hand, means something totally different in Brit. Fanny is the female genitalia. So saying "fanny pack" to a Brit would be the same as saying "pu$$y pack".

I used to get into trouble trying to explain the difference between systems of measure by reducing liquid volumes (US and Imperial) to firkins. This was something of a problem because none of the units of liquid measurement are the same between the two systems. For the record, 1 firkin = 9.0 Imperial gallons = 10.8 US gallons = 40.9 litres (or liters in the US).

The British could relate to it, being rather steeped in history, but for some reason the Americans thought I was being sarcastic about it when I talked about their "firkin units of measure".

Estimating actual oil supply out 20 years is much more challenging given that most of the oil which will be supplied in 2030 has not yet been discovered.

Really? Most of the oil supplied today was discovered before 1989, and the rate of discovery has shown a a general decrease over the last fifty years. I'd say just extrapolate the rate of discovery, and subtract the future production, and you can come up with a pretty reasonable estimate of what the supply will be in 2030.

Ird -- Excellent point. When the cornucopians offer their view of future undiscovered oil reserves in the 10's of billions bbls they don't point out the 100's of billions of bbls discovered during the 50's and 60's which are still coming out of the ground today. Most Americans are shocked when they hear that we are the third largest produces of oil in the world. And then point out this production is coming out of our wells at an average rate of less then 10 bopd and they get even more confused.

And then they hear that the US has just experienced one of the biggest y-o-y increases in oil production and they get even more confused. But that increase came from the DW oil fields in the GOM. And those fields will be depleted/abandoned when those west Texas 3 bopd wells drilled in the 1950's are still producing. At this point you've completely lost the attention of Joe6Pack IMHO.

I suggest a tradeoff between speed and weight. PHEVs can be light and fast but heavier natural gas powered vans and pickups be speed limited. That eliminates cars which are both large and fast. The PHEV gets used for commutes and the van for groceries, taking kids to soccer and transporting the dog. Since small families are unlikely to use both vehicles at the same time make it possible to own both for the same annual registration fee. Remember carbon taxes on inputs will already be high.

I use a bike, cycling past all the big 4WD's as I ride to the railway station. I don't get the economics of car ownership, in 20 years time all finance put into cars will be lost, the car is scrapped. The money I put into the house paying off the mortgage, in 20 years time, should have appreciated quite a lot. In the national statistics I could not find a valuation for the car fleet. Buildings, built environment, industry all had value for national wealth, and yet the vaste car fleet was not considered 'wealth.' I was wondering whether it was considered a 'cost,' or economic burden instead?

Here's Morgan again...peddling another version of the same communist idea of not allowing the market to determine price...this time he added the word "Market" at the end of its title, like that's going to fool anybody!
Morgan buddy, there is already a "vehicle efficiency market" mechanism. And it works without government birocracy to keep track of "MPG balancing points".
It is called The Gas Price.
The way it works is this: the one who consumes more (larger vehicle, longer distance, bad driving, larger load...) pays more at the pump.

But hey, if your idea ever gets implemented (and you stand a good chance, I see the majority gets stupider and stupider...), I have an improvement to propose. Let's extend your idea to everything and anything.
Let's start with FOOD. The Food Efficiency Market. The Monthly Calories Balancing Point will be posted on the Internet and at all food outlets and supermarkets...You take it from here Morgan…ROFTLMAO

The idea is that efficiency would be pushed by the free market and would do so on a constant basis independent of rising and falling oil prices.

How is efficiency a bad thing?

I am not peddling anything other than a free market solution which is controlled by the public directly and NOT the government, which would be the case with a retail gasoline tax.

The issue is that we are facing an almost definite oil supply concern which is highlighted by the IEA. We can wait until oil prices go to US$150+ per barrel and stay there permanently (which would involve doing nothing, allowing the pump price alone to push for efficiency and be at the receiving end of a severe economic shock) or we can try to get ahead of it.

Morgan,
I can't believe you don't see the contradiction in "a free market solution...controlled by the public".
A free market solution is always controlled by the MARKET, and only by the market.

And the severe economic shocks are always the results of us "trying to get ahead..." and not allowing the market to work.

And I'm not sure who's "We"...like in "we can try to get ahead of it"...
it that "We the people" who elected GWB two times president?..."We, the politicians" in Canada and US who are wasting taxpayer’s money on ethanol from corn and grass?..."We, the scientists" who adjusted the climate data to fit already drawn conclusions...
I'm scared shitless of what "we" could do, even when "we" have best intentions...

Please Morgan, let the market work with no control from "the public", the government, the party or the Secretary General.

Values would be set by the market without any sort of government control of market prices or involve any government net receipt of funds. The positive externality would be that this market would create a constant economic pressure toward efficiency ahead of any oil price spikes.

dohboy,
the more interference in the market, the worse the market will work. Up to the point it won’t work at all. Just ask the former communist countries in Eastern Europe... or take a trip to North Korea.

The "recent history" you're alluding to is a result of market intervention. It all started with the creation of the Federal Reserve Bank and the attempt to establish and control by other mechanism than the market THE PRICE OF MONEY, the credit rates in other words.
That was only the beginning...more interventions piled up later...that's how we got where we are today...

No use to argue with market believers, D. They KNOW, in the same way that a rapture-ready 'christian' KNOWS. Comes of living in USuk, and being blasted all our lives with that permanent bullshit blizzard of pro-market mysticism that the corpocracy gangsters find so convenient as a smokescreen for their scams. Lots of people are swept away by such endless propaganda, inevitably, and prefer to believe it rather than their lying eyes.

In reality, though, free markets are about as rare as unicorns; and about as powerless to halt geophysical realities. And the pretend 'free' markets which we all suffer in the West are roughly the most inefficient way to allocate anything. No need to look any further than US exurbia. "The greatest misallocation of resources in the history of the world", as JHK likes to describe it. Real efficient, hey?

Command economies, pretty universally around the world, and an internationally-agreed Manhattan Project to address our Synergising Global Crises might mitigate the mess we're in, though I wouldn't give you short odds. But the terminally-bankrupt 'free' market delusion? Joke.

Nicely put. "Markets" first arose in very highly regulated societies in the Eastern Mediterranean in about 2000 BC. No 'market' could exist at that point (or ever after) without strong protection from a well-armed central authority. Without such, it was all just piracy.

Piracy is actually a pretty good description of most of Western "economic activity" for the last 500 or so years, and piracy of the global commons" describes most current economic activity, as far as I can see, though these views might not make it to the pages of the WSJ oped any time soon.

"...Comes of living in USuk, and being blasted all our lives..."
I feel for you buddy and I now understand why you're so clueless.
I don't live in USuk.
I do admit I was "blasted... with permanent bullshit blizzard" in the first part of my life- but "the blizzard" was communist anti-market "mysticism". That's the reason I can so easily see thru it today and feel the need to denounce it as I do right now.
You're wrong in your assumptions and there's no wonder your conclusions are equally wrong.

My regret is that people like you do not usually get to fully experience the society they deserve and their foolish ideas would create.
It is their children and their grandchildren who will have to pay the price.

You and your fellow socialist/communist bullshiters owe me half of my life back.
Add to the bill my father's and my grandfather's wasted lives…
You're right, there is no use in arguing. There is too much at stake. I'll meet you on the battlefield.

Firstly, IIRC, oil production and imports in the USA are federally subsided.

Secondly, his point was that a nation implementing such a scheme will gain a competitive advantage over a nation without such a scheme; presumably because they will not only shift faster to independence from ICE vehicles, but also because they will, one assumes, extract greater economic benefit from each litre as more frivolous uses of fuel are discarded.

Would you mind explaining how are the imports in USA federally subsided...or subsidized, whatever...?
I'm familiar with Husky Energy for example.
HSE sends heavy oil from its Canada wells to its Lima/Ohio refinery and sells the products in US. Please explain how and to what extent are Husky's imports subsidized.

well if its products were shipped on rail at this point in the game it would be very difficult to determine how much subsidy is left there, it was once huge ('the people' gave away every other section of land to the rail deveoper) if the products were shipped by road a whole lot of more determinable subsidies are in play. Your ideal free market, like any other ideal, is non existent. Lets start fresh right now, no gov protection of private property, just whoever has the best ability to seize and hold what he can keeps it until it gets taken. Of course the game would be rigged for those who are fit and more so for those already controlling more resources or who have more natural ability to control people. Commerce markets are important, but they are never free, lots and lots of biases are built in and readjusted all the time in the ever entwined political reality market, also not free. When the ideal of free market gets deified it is as dangerous as other 'deity' Now there does appear to be one free market, the one Darwin so aptly described. All of our traits, tools and institutions are in the end judged by how well they work in Darwin's free market.

I'll just toss this out, since many people don't know anything about Husky Energy and I do, having consulted for them.

Husky is a major producer of Canadian heavy oil (not quite oil sands, but getting close). They have an extensive retail network in Canada, but much of their production is sold to US consumers at market price. None of their US sales are subsidized.

Husky, unbeknownst to most people, is controlled by Chinese interests. If Americans don't want to pay market price, they will find someone else who does. It's all about money, and American money isn't looking that good at this point in time.

very aware of Husky, back in the day when the little 2+ gallon tank on my BSA Thunderbolt would get me all of about 110 miles, Husky stations in Dakota and Wyoming were the only thing my Sunoco card worked at that showed up often enough to keep me rolling. They kept cars I hitchhiked in on my first trip back from AK fueled as well (I had no cash but my sole credit card worked till I could earn more).

I didn't know Husky was Chinese controlled, but my subsidy comment was of course not to be taken as company/country specific. Just trying to point up that we have so many subsidies embedded in BAU. They need to recognized and addressed if we are to come up with a more sustainable economic model. I'll probably leave that theme alone for a while now, but it will bring it back again from time to time.

That's the trouble with bullshit comments. They are easily debunked because they lack specifics. The bullshiters hate specifics. When confronted, the bullshit posters can't provide any numbers for back-up. They will just "bring back again from time to time" their bullshit comments...

So you are all for dropping government protection of private property and letting it rip. Enjoy. You are in the west now so worship whatever god you like, but expect worship to be called worship. I'm fine with specifics. I did mention one I thought necessary: when the railroads developed their lines across the US they were awarded immense landholdings--every other section of land for twenty miles on each side of their lines mid country to coast including the mineral rights beneath them. This was a huge subsidy from made from the public's land holdings. I didn't argue it was unnecessary or excessive only that it had been put in place. The interstate road system is a huge public undertaking and has directed the development of the nations economy, it subsidizes all activity that relies upon it. It is an oil intensive system and is likely not sustainable for the long term in its present form.

Both subsidized railroad development and road development directed the nations growth . Only two but hardly isolated examples. This is never recognized by any who spout that the free market must not be hampered by subsidized activities. When guiding the nations growth in a new direction public subsidy is often a part of the steering mechanism. The market and the government are forever entwined, its is dance, when it works well, a cluster f*** when it doesn't.

Entrenched capitalists do a fine job of directing the subsidies (these can be preferential tax codes, preferrential licensing and many other forms--entire industries are thus subsidized) toward their own entrenched capital, but the fundamentalist worshipers of 'the free market' scream if the public redirects some of those subsidies to foster a different direction for growth.

Nothing I said was debunked by RMG--his refering to 'the freeway' as 'the expensive way' many threads up indicates he is quite aware of the complexity of government policy and subsidy issues, his comments on health insurance in another post show he isn't gung ho for the free market US health care system, always trade offs. Certainly no specifics have been offered by you, except maybe a call to anarchy. Mogadishu may be calling you.

How does one deicide which is better, Communism or Capitalism ? Well if it's George Bush capitalism. America should have controled Iraq oil by now and Iranian oil by 2020. Which means the United State rules the world for at least the next 100 years. Now how are the Chinese going to top that?

Cookie/99 -- jumping into the chat late but as to how the Chinese are topping the US when it comes to tying up oil reserves they are doing it the old fashioned way: pure unbridled capitalism. They may have communist rule within their borders but they function as a well oiled (pun intended) free market machine in the rest of the world. They are laying out cold hard cash and beating just about everyone at the game. However much oil/NG they end controlling in Iraq or Iran will be determined by their free market efforts. And short of the US starting WWIII that's how it will continue to play out. The thought of the US gov't buying up foreign oil reserves doesn't exist even at some fantasy level. In this respect the Chinese political system has all the advantages: single minded focus, huge cash reserves (mostly US $'s), total lack of public input and an absolutely mandate to secure those oil reserves to preserve their economic growth. The US has none of those going for it IMHO. The Chinese are beating the hell out of the US with respect to energy security not so much by being communists but by being good old fashioned cutthroat capitalists IMHO.

Well, its a really simple scientific experiment. You take a country, divide it in half, give one half a Communist government and the other half a Capitalist government, and wait a couple of generations to see how it comes out.

For instance, take a a developed country like Germany and split it into East and West halves, or an undeveloped one like Korea and split it into North and South halves.

And after two generations, what are the results? Who's richer? The envelope, please... Yes I think we have a decision, it's (drum roll):

CAPITALISM WINS!

Thank you, thank you, the winners now can take home first prize and all the gold. The losers, well, we'll try not to talk about them...

Now how are the Chinese going to top that?

They can beat them at their own game. If anything, the Chinese are more capitalistic than the Americans these days.

What's happening to the US right now is WINNING? Lasting twenty years longer than the USSR, before crashing harder and deeper, and from the selfsame causes? That's winning?

Obviously savvy grown-ups need to stay completely clear of that infantile competition. Pretend communism versus pretend 'free' market capitalism? Both lousy empires run by profoundly-criminal imperial gic-classes (gangsters-in-charge). And the Chinese facing-both-ways gics not a shred better. Whatever flavour of convenient ideological fairytale they sell to their true-believers, I never heard of any empire in history that wasn't in reality a violent, mass-murdering, thieving, cheating, deceiving machine, behind their preferred Permanent Bullshit Blizzards. Rot 'em all!

Sad thing is though that the poisonous impulse for mass human societies to drift into capitalism seems to be down to some basic flaw in human psychology: Larger than the community size of a gather-hunter band, we just don't seem able to resist the disastrous temptations. What the feck are we going to do to escape that?

Well, one thing that can help is to forget motorised personal transport, which is likely soon to be a thing of the past for most of us anyway, and get a bike. Nothing like a bike ride, in any sort of weather, for clearing the mind of fetid urban idiocies. Something to do with the contemplative pace, and the regular endorphin highs, I surmise. Gets rid of the huge gut as well.

Regarding that observed static per capita oil consumption (4.6 barrels per year per capita over the past 27 years): there's an interesting new paper in Climate Change showing that neither population nor standard of living are required factors in forecasting energy consumption. Garrett works from thermodynamic principles and shows a very startling result: from a global (collective or civilisational) perspective the “human system”

‘…grows through a self-perpetuating feedback loop in which the consumption rate of primary energy resources stays tied to the historical accumulation of global economic production … through a time-independent factor of 9.7 ± 0.3 mW per inflation-adjusted 1990 US dollar.’

He goes on to demonstrate mathematically that stabilization of CO2 emissions would require the addition some 300 GW of non-carbon emitting energy production per annum, which roughly equates to the commissioning of one 1,000 MW nuclear power plant per day. A nice demonstration of the scale of the “energy problem” as well as the “sustainability problem” – even if we could build nuclear at the rate required, supplies of uranium are highly unlikely to be available.

However, I am uneasy with his mixed use of financial and physical values. He uses inflation adjusted US dollars to measure economic output and cumulative value, but since money is an abstract entity, created by fiat, I am not comfortable equating it with physical values.

300 GW per annum?! Even without being able to go through the Springerlink paywall, that's ridiculous on its face. US electric consumption is only about 450 GW of which less than 72% is fossil-fired, so 300 GW/yr would take the US electrical grid to zero emissions in 13 months. Add another 4 months to create the generating capacity to replace gasoline and 3 months to replace diesel, and you're up to 20 months. Multiply by 4 for the rest of the world, and you're done in less than 7 years.

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